Greif A 2025 Q3 Earnings Misses Targets with Net Income Declines 25.9%

Greif A reported its fiscal 2025 Q3 earnings on Aug 28th, 2025. The company missed revenue and earnings expectations, with revenue declining 2.6% to $1.13 billion and net income falling 25.9% to $69.4 million. Despite a $171 million surge in adjusted free cash flow, the company's strategic focus on cost optimization and divestitures did not fully offset the revenue and profit declines. Greif raised its full-year EBITDA and free cash flow guidance.

Revenue
Greif A’s total revenue in Q3 2025 decreased by 2.6% to $1.13 billion compared to Q3 2024. The decline was driven by softer demand in the Durable Metal Solutions and Sustainable Fiber Solutions segments. Specifically, the Customized Polymer Solutions segment reported revenue of $339.8 million, Durable Metal Solutions generated $399.8 million, Sustainable Fiber Solutions contributed $308 million, and Integrated Solutions accounted for $87.10 million.

Earnings/Net Income
Greif A’s EPS declined by 27.2% to $1.10 in 2025 Q3 from $1.51 in 2024 Q3. The company's net income also declined to $69.40 million in Q3 2025, a 25.9% drop from $93.60 million in Q3 2024. The decline in earnings was primarily attributed to lower net sales, higher operating costs, and the impact of the Delta Petroleum Company divestiture from the prior year period.

Price Action
The stock price of Greif A declined slightly during the latest trading day, with a 0.83% decrease, and a 1.37% decrease over the most recent full trading week. However, the stock showed a positive 2.86% increase month-to-date.

Post-Earnings Price Action Review
Following its earnings release, the stock market highlighted several companies with positive earnings surprises and strong long-term growth prospects. PureTech Health, for instance, reported a 542.7% increase in contract revenues in the first half of 2025, primarily from royalty revenue from its Cobenfy asset. The firm also reduced general and administrative expenses by 10% to $24.9 million. EHang, despite reporting a $99.64 million loss in Q2 2025 due to high R&D spending, showed historical trends of a compelling win rate and average return after earnings beats. Ambarella exceeded consensus EPS estimates, with a recent earnings surprise of +150.00%, and is expected to report quarterly earnings of $0.35 per share in its upcoming report. Greif reported adjusted EPS of $1.03, beating the Zacks Consensus Estimate, with cost optimization and portfolio transformation as key drivers. Veeva Systems also beat estimates with its Q2 earnings and revenues, showing strong investor confidence through significant stock gains.

CEO Commentary
Ole G. Rosgaard, President, CEO & Director of Greif A, highlighted the company's strong execution in Q3 2025, emphasizing cost optimization and portfolio transformation. Rosgaard noted that the divestment of the containerboard and timberland businesses would sharpen Greif's portfolio and reduce leverage below 1.2x. He underscored early progress on cost savings and shared an example of operational efficiency gains at the Welcome, North Carolina plant, reflecting the "Build to Last" strategy. Rosgaard expressed confidence in outpacing $100 million in cost reductions and highlighted resilient performance in customized polymer and integrated solutions segments, despite softer demand in other areas.

Guidance
Greif A raised its full-year 2025 EBITDA guidance to a midpoint of $730 million and free cash flow to a midpoint of $310 million. The EBITDA increase was driven by SG&A cost reductions and lower CapEx, assuming stable volume, price, and cost trends. CFO Larry Hilsheimer noted that Q3 free cash flow hit $171 million, up 400%, and reiterated that the containerboard business would contribute approximately $25 million of EBITDA per month in August and September. Guidance for 2026 remains unadjusted pending the divestiture closure, but cost savings are expected to contribute $25–60 million annually.

Additional News
Greif announced the sale of its timberlands business for $462.0 million to Molpus Woodlands Group, subject to customary closing conditions, with a closing expected on October 1, 2025. Additionally, Greif finalized the sale of its containerboard business to Packaging Corporation of America for $1.8 billion, with the transaction expected to close on August 31, 2025. The company also declared increased quarterly cash dividends on its Class A and Class B Common Stock, reflecting its commitment to increasing direct shareholder returns. The Board of Directors raised the dividend for Class A Common Stock by $0.02 per share and for Class B Common Stock by $0.03 per share from the prior quarter. The company's leverage ratio decreased to 3.1x from 3.6x in the prior year quarter, indicating improved financial health.